Peter Trahanas v Jefferson Ford [1995] IRCA 536

INDUSTRIAL RELATIONS COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VI 3644 of 1995 B E T W E E N : PETER TRAHANAS Applicant AND JEFFERSON FORD Respondent Before: Judicial Registrar Millane Place: Melbourne Date: 3 October 1995 REASONS FOR JUDGMENT In this proceeding the Applicant, who was employed by the Respondent as a used car salesman between 20 May 1995 and 29 June 1995, alleges that his employment was unlawfully terminated by the Respondent. On its part, the Respondent denies that any act of termination occurred at the initiative of the Respondent and, further, alleges that the Applicant abandoned his employment on 29 June 1995. If it is unsuccessful in its primary defence, the Respondent concedes that it had no valid reason for terminating the Applicant's employment and does not contest the allegation that the Applicant was not paid any compensation in lieu of notice under s170DB of the Industrial Relations Act 1988 (the Act). After considering all the evidence which included the evidence of the following witnesses:- (a) called by the Applicant (i) the Applicant; (ii) Jordanne Elizabeth Stewart, the Applicant's fiancee; (iii) Dr Geoffrey Charles Morrison Kemp, the Applicant's treating doctor; and (b) called by the Respondent (i) Mark Pickett, the manager of the Respondent's Frankston yard; (ii) Anthony Earl Waldren, the Respondent's new and used car sales manager at South Melbourne; (iii) Paul David Holzinger, a salesman at the Respondent's South Melbourne yard; (iv) Michael Lex Hazelmore, the Respondent's service manager at South Melbourne; and (v) Raymond Terry Benson, the dealer/principal and general manager of the Respondent I have reached the conclusion that the Applicant was at the relevant time not coping with the stresses imposed on him by his relatively new job as a used car salesman and, on 29 June 1995, following an acrimonious exchange with a fellow salesperson he abandoned his employment; in that by his conduct he clearly evinced an intention to no longer be bound by the terms of the contract of employment. Whilst the Applicant may genuinely believe that the events surrounding his departure from his place of employment amounted to conduct which initiated the termination of his employment I am satisfied that as a result of a heated argument he left the premises and, having left, then determined not to return to a job he found very stressful and to which he does not appear to have been suited. I have no hesitation in accepting his doctor's evidence that from at least 20 June 1995 he was suffering work related stress and from at least 29 June 1995 he has not been able to work because of this and the anxiety associated with this proceeding. Such evidence is of course consistent with a desire not to return to a workplace he was unhappy working in. Background Facts For 2˝ years prior to approximately January 1995 the Applicant conducted his own business as a Public Relations Consultant, consulting specifically in community projects. When he finished his last project earlier this year, he was not employed again until he answered the Respondent's advertisement in the Herald Sun in approximately May 1995 advertising a new car salesman's position. He was interviewed by Mark Pickett (Pickett) who at the time was working as consultant in a senior position at the Respondent's South Melbourne office before Pickett moved to manage the Respondent's Frankston yard which opened on 26 June 1995. The Applicant was not successful in gaining the new car salesman's job, however, within a week or so, he was contacted by Pickett and offered the opportunity to work in the Respondent's used car sales division as a salesperson. This was on a retainer of some $433 gross per week together with commission on sales and the use of a motor vehicle from the Respondent's lot. The Applicant had no prior car selling experience. The arrangement was for the Applicant to attend the Respondent's yard on the following day, Saturday 20 May 1995, to assist in a promotion called "The Main Event". On the evidence I am satisfied that, because of his inexperience and the sales practice adopted by the Respondent, the Applicant did not have authority to sign off the sale of a used car during the currency of his employment. In other words, he was required to meet and greet customers, demonstrate cars and, on ascertaining the customer's needs, was required to introduce them to one of the management staff who were the only ones authorised to agree to a sum for the trade-in of a motor vehicle and the sale price of the used vehicle to be sold. This had some bearing on the commission payable because others were involved in "clinching the deal". The Applicant had the use of a motor vehicle from the Respondent's lot and this use included private use at night and over the weekends. He alleged that this was a benefit which should be calculated at some $150 per week because of petrol, maintenance and other costs associated with running a vehicle. At the same time he conceded that he owned his own vehicle which was driven by his girl-friend, Jordanne Elizabeth Stewart (Stewart), who is now his fiancee. Apart from some very minor criticisms, it was agreed that there was no complaint concerning the Applicant's performance. If anything, he was well regarded as a new salesperson; sufficiently so for Pickett to ask the Applicant to go to Frankston to work on at least two occasions. The hierarchy of command and authority in the Respondent's Melbourne yard was a major issue because it was alleged by the Applicant that his fellow salesperson, Paul David Holzinger (Holzinger), had been elevated to a position of management shortly before the Applicant was allegedly fired by Holzinger on 29 June 1995. The Respondent denies that Holzinger terminated the Applicant's employment or said any words on 29 June 1995 which could amount to a dismissal of the Applicant and, more particularly, it is contended by the Respondent that, whilst Holzinger was more senior to the Applicant in the sense that he had been employed longer as a salesperson in the used car division, he was not a manager; nor did he have authority to terminate the Applicant's employment. The principal/dealer and General Manager is Raymond Terry Benson (Benson). Below him is Anthony Earl Waldren (Waldren) who is manager for new and used cars and, whilst he was working from the South Melbourne yard for some 12 weeks, Pickett was employed as a consultant at South Melbourne; although he appears to have exercised managerial authority in at least hiring staff, if not in other matters. There is also a Manager in the new car division of the South Melbourne yard, which division is much larger than the used car division. Otherwise, the used car division has two salespersons and, when Pickett left for Frankston, they were Holzinger as the more senior salesperson and the Applicant as a trainee salesperson of some 4 to 5 weeks experience. It would be fair to say that the evidence of the Respondent's witnesses on what precise title each person carried and the extent of the authority each person had at the South Melbourne yard was confused. Nevertheless, I am satisfied that by late June 1995 the Applicant understood what the role of each person was at the South Melbourne yard. In the days preceding 29 June 1995, it is his evidence that, at a sales meeting conducted by Waldren, Waldren told those assembled including Holzinger, that "Paul Holzinger would be used car manager". Notwithstanding this alleged statement in his evidence-in-chief, the Applicant immediately qualified this evidence by saying that "maybe" these were not the exact words used by Waldren and he had in fact said "any queries would now be directed to Paul Holzinger, not Mark Pickett". The Applicant also stated that Holzinger asked people to do tasks on occasions but did not direct them. Interpreted in the most favourable light to the Applicant, the alleged statement by Waldren that any queries would now be directed to Holzinger may have conveyed the impression, albeit a wrong one, to the Applicant that Holzinger had been given some managerial role. On the other hand, the Applicant's evidence is equivocal and the absence of any direct statement to the effect that Holzinger had been appointed to a management role coupled with the evidence of all the Respondent's witnesses that Holzinger never then had; nor did he now have, any managerial position, indicates quite strongly that on 29 June 1995 he did not have the authority to terminate the Applicant's employment even if he had been intemperate enough to allegedly utter the words "you're fired". The Alleged Termination Mid morning on 29 June 1995 there was a verbal altercation between the Applicant and Holzinger in Holzinger's office. The Applicant alleges that he had for the second or third day in a row been asked by Holzinger to complete the "L" forms for used cars on the lot. These forms contain information displayed on the used cars in the lot. According to the Applicant, these forms had been drafted by him on at least the previous day and given to the Receptionist for typing. It appears they had not been typed. Once the Receptionist had been instructed to type the forms, the Applicant and Holzinger were in Holzinger's office when the Applicant told Holzinger they "needed to get their act together". This was a reference to having to duplicate the work on the "L" forms. Apparently, this caused Holzinger to "explode" with rage saying, amongst other things, "I'm the fucking manager and you'll do as I say ... don't question me ... do you want me to beat it into you ...". Whilst this tirade proceeded, the Applicant recalled Holzinger banging his fist on the table. The Applicant interpreted Holzinger's behaviour as a physical threat and told Holzinger "I don't have to take this shit" and took his leave from the office and from the premises altogether. Before departing, he did write his telephone number in Holzinger's diary telling Holzinger that he did not want to be paid for that day and that he should ring him, the Applicant, in a couple of hours. If the Applicant's evidence is accepted, I found the Applicant's behaviour as alleged rather curious. If he believed there was an imminent threat to his physical safety, it is difficult to understand why he stopped and, in Holzinger's presence, entered his home telephone number in Holzinger's diary and made the statement to Holzinger as alleged. On balance I am unable to accept that self preservation and personal safety caused him to flee the premises. In saying this I do not wish to convey the impression that the Applicant was not deeply upset or stressed by the exchange in circumstances where until that date the working relationship between the two men had been a civil one. Holzinger's evidence confirmed that there was a verbal altercation over the completion of the "L" forms. He claims to have been seated at his desk when the Applicant in the discussion concerning the duplication of the "L" forms said in an aggressive way "Listen to me". This caused Holzinger to rise to his feet and reply by saying "No, you fucking listen to me ... I'm sick of doing all the work". The Applicant had a pen in his hand and wrote his telephone number in Holzinger's diary telling him to ring in a couple of hours and the Applicant then walked out of Holzinger's office. Holzinger alleges that he called after the Applicant asking him "What's wrong" and followed the Applicant across the service area of the premises trying to get him to respond to his query. It is the Applicant's allegation that Holzinger ran in front of him and said "Fucking come back to the office" and when the Applicant said "No" Holzinger said "You're fired". Holzinger agreed that he followed the Applicant to try and find out what was wrong with him but categorically denied telling the Applicant that he was "fired". He recalls the Applicant rounding on him before leaving the premises, jabbing his finger in Holzinger's face and yelling "I don't want to fucking talk about it" which caused Holzinger to say "Fuck off" and return to his office. Michael Lex Hazelmore (Hazelmore) is the Respondent's service manager and on 29 June 1995 he heard and witnessed part of the ruckus between the Applicant and Holzinger. He caught the last part of the exchange between them when he saw the Applicant, who was then closest to the exit from the service area into the laneway, pointing his finger in Holzinger's face and saying "I'm going" to which Holzinger replied "Fuck off" and proceed back towards his office with the Applicant leaving via the rear laneway. Apart from this final segment of the exchange, Hazelmore only heard a lot of swearing and yelling beforehand. Even so, his observation of the last exchange between the antagonists corroborates Holzinger and directly conflicts with the Applicant's allegation that Holzinger's parting shot was to tell him that he was fired. There was nothing in Hazelmore's demeanour as a witness or the evidence given by him which would suggest that his evidence should be rejected. It is also alleged by the Applicant that shortly following his departure from his employer's premises, he used his mobile telephone to ring the Receptionist and tell her he was fired and to further arrange for a client to be looked after. The Receptionist is no longer employer by the Respondent and according to the Respondent, is overseas and not contactable. The Applicant also alleges that he rang Stewart, who met him at home and they were together in the afternoon when Waldren rang him and, with the use of their telephone loud speaker, both heard Waldren say to the Applicant "I hear Paul Holzinger fired you today ... what do you want to do about it?" The Applicant felt stressed and unable to speak to Waldren at that time and cut him off saying "I'm stressed out, I want time to calm down and Jordanne has made an appointment with the doctor ... please ring me tonight". The Applicant and Stewart allege that Waldren responded by saying that "I might not ring you if you don't talk to me now" and ended the conversation. Stewart was very supportive of her fiance and this observation may go some way to explaining the inconsistencies in her evidence, which inconsistencies have led me to reject her evidence as being unreliable corroborative evidence. A significant component of the Applicant's claim for compensation turns on his claim that as a result of the circumstances of his termination he suffered stress which has thus far precluded him from seeking gainful employment. In support of this claim the Applicant called his treating general practitioner, Dr Geoffrey Charles Morrison Kemp (Dr Kemp). For the purpose of the litigation Dr Kemp prepared a medical report on a 18 August 1995 (see Exhibit A6). Whilst Dr Kemp had treated the Applicant since 1990 for conditions unrelated to stress it appears from both the medical report and the evidence given that on 20 June 1995 the Applicant attended the doctor at the request of Stewart initially to discuss problems in their personal relationship concerning the Applicant and Stewart's commitment to one another and their disagreement over whether they would have children. The doctor's evidence is that at this consultation Stewart raised the question of the stress and sleeplessness caused by the Applicant's new job and the doctor recorded these matters; including them in his report as follows: "Peter Trahanas first came to see me on 20 June, 1995, eight days before he was dismissed from his employment at Jefferson Ford. He told me that he was under a lot of stress. He said that he was being asked to cheat people; he described knots in his stomach while he was at work caused by the anxiety and engendered by the conflict between what he was expected to do and what he personally believed was right. He said that he could not sleep at night." Stewart gave her evidence before the doctor gave his evidence. Her tendency in giving evidence was to support her answers to questions with statements of absolute certainty as to the accuracy of her answers. For instance, she was certain that - (a) the Applicant had not been treated for stress or nerves before this incident even though the Court was by then aware of the consultation with Dr Kemp on 20 June 1995; (b) the Applicant was not unhappy in his employment prior to the incident and had not mentioned any stress or anxiety before 29 June 1995; nor had he experienced problems sleeping - in her words "absolutely not"; (c) the Applicant had not experienced any internal conflict caused by his employer asking him to cheat people because this behaviour did not fit his beliefs; and (d) the Applicant had first experienced stress on the date of the incident and had never exhibited it prior to that date. Stewart accepted that it was odd for an employer after having allegedly fired an employee to ring and, apart from referring to the firing, ask the Applicant "What are we going to do about it?". Even so Stewart was adamant in telling the Court that the conversation with Waldren was as alleged by the Applicant. Of course, Waldren denied making any reference to Holzinger firing the Applicant because at the time he telephoned the Applicant he had been told by Holzinger about the altercation and further was told that the Applicant had left the premises leaving behind his telephone number with a request that he be called. Waldren rang and after an introductory statement asked the Applicant what was happening to which question the Applicant responded by saying that he could not talk about it then and wanted Waldren to call him later. At the time of the call Waldren believes that the Applicant had "stormed out" and left his employment and all Waldren wanted to know was what the Applicant intended to do - "I rang him to discuss the situation to see if he left for a day, month or a year". It is improbable that the employer having fired the Applicant would then seek to ask the Applicant the question alleged. It is more likely than not that Waldren did make an enquiry to ascertain what the Applicant was going to do. It is Waldren's evidence that he rang the same evening and the following morning without there being any answer and this prompted him to send a letter dated 30 June 1995 (see Exhibit A5) which said: "Further to our telephone conversation to discuss your situation regarding the events relative to you leaving the premises. As yet, you have not returned my call, as you stated you would. I would be appreciate (sic) you doing so to enable us to discuss your ongoing employment." The Applicant and Stewart both told the Court that no further calls were received by them; nor any messages left on their answering service. Moreover, the Applicant denied receiving the letter dated 30 June 1995 until he received a copy of it from Raymond Terry Benson (Benson) with a covering letter dated 27 July 1995 which said: "Please find enclosed a copy of the letter which was sent to you by Mr Tony Waldren. As of this moment, let me again say that I believe that you had abandoned your employment by walking out of our premises. As I have now talked to you and there is an obvious misunderstanding, I again say that your job is still available, to recommence if you wish at Frankston or South Melbourne. I will ring you tomorrow morning as I stated." Even if the subsequent calls allegedly made by Waldren were not made and the letter of 30 June 1995 was not sent on or close to that date it is of some concern to me that the Applicant, who professed an intention to remain in his employment and pursue his career as a used car salesperson, made no attempt to contact his employer before issuing his application before the Court on 6 July 1995. His failure to do this is consistent with a desire to terminate his employment altogether. Stewart's evidence was that at first she only knew that the Applicant had been fired because he had not told her about the circumstances surrounding the alleged termination. She first became aware of the alleged circumstances some days or a week later and contrary to what the Applicant claimed, they did not discuss the circumstances in any detail on the weekend following the alleged termination on Thursday, 29 June 1995. So far as any physical threat was concerned she recalled that she was not told of this until "quite some time later". Dr Kemp did not recall nor did he record any complaint of a threat of physical violence towards the Applicant. He did however form the view on 30 June 1995 and on subsequent visits that the Applicant was suffering stress and physical symptoms associated with stress caused by his sacking. Dr Kemp produced to Counsel for the Respondent Dr Kemp's notes from which he had prepared his medical report. These notes show, amongst other things, that on 30 June 1995 the doctor wrote "resigned from job on 28th June" and this was crossed out and the words "was sacked from" were inserted in the notes. The doctor agreed with Counsel for the Respondent that the notes made were made because of the information transmitted to him by the Applicant. It is abundantly clear from the doctor's evidence that by 20 June 1995 the Applicant was very unhappy in his new job. There was no evidence called of any matters to support an assertion that the Respondent required the Applicant to "cheat" customers and I make no findings on these matters. Nevertheless the Applicant's perception of what was happening in his employment and the obvious stress he was suffering be that because of his employment or matters concerned with his relationship make it more probable than not that after what the doctor described as a "flaming row" the Applicant left his employment and did not return even when a number of opportunities were offered both by Benson and Pickett to work at either South Melbourne or Frankston. This is not a case such as that dealt with by the Judicial Registrar in Minato v Palmer Corporation Ltd (unreported, Murphy JR, VI1239 of 1995, 30 June 1995) or as in Grout v Gunnedah Shire Council (1994) 125 ALR 355, where special circumstances existed militating against the employer accepting a resignation when the employee had either acted in "the heat of the moment" or had acted whilst ill and then sought to withdraw the resignation relied upon by the employer. The Respondent's action in this case supports the view that it tried unsuccessfully to discuss and clarify the position with the Applicant and the Applicant's conduct was such that it was indeed a resignation or abandonment; in that he clearly evinced an intention to no longer be bound by the terms of his contract of employment (see Boyd v Godfrey Hirst Australia Pty Ltd and Boyd v Tybar Engineering Pty Ltd VI246 of 1994 and VI247 of 1994, unreported, Staindl JR, 30 January 1995). Accordingly the Applicant, who in this case carried the burden of proving that there was a termination, has failed to discharge that burden and his application is dismissed. MINUTES OF ORDERS THE COURT ORDERS THAT: 1. The Applicant's application is dismissed. I certify that this and the preceding fifteen (15) pages are a true copy of the reasons for judgment of Judicial Registrar Millane. Associate: Dated: 3 October 1995 Solicitor for the Applicant: Clancy & Triado Counsel for the Applicant: Ms J. Patrick Solicitor for the Respondent: Ms Natasha Warwick Victorian Automobile Chamber of Commerce Counsel for the Respondent: Mr C. Blanden Date of hearing: 27 & 28 September 1995 Date of judgment: 3 October 1995